(continuing): "the program was designed to help pay for
infrastructure projects in rural areas and poor urban neighborhoods.
After bank lending dried up in the last recession, developers turned to
the program to finance hotels, condominiums and other projects from
Manhattan to Miami. As a result, the number of EB-5 visas awarded grew to almost 9,000 last year,from fewer than 100 in 2003.

Da
Silva, though, is building a $156 million stadium, not a high-rise
building or a shopping mall, and he is marketing to foreigners not
because lending is tight, butbecause lawmakers in Florida would not
provide subsidies for the stadium in Orlando’s Parramore neighborhood.

Orlando City’s use of the visa program, which was criticized by a leading Republican [Grassley] in March
as “riddled with corruption and national security vulnerabilities,” is a
new approach for sports teams looking for new ways to pay for stadiums
without financial support from local communities, where officials are
under pressure fromvoters opposed to using public money to help wealthy
owners."...

(continuing): "EB-5
financing helped pay for infrastructure work connected to Barclays
Center in Brooklyn, but not for the arena itself. Developers previously
tried to use the EB-5 program to finance stadium-only projects in
California, Florida and elsewhere, but they hit roadblocks, including
the unpredictable pace of getting EB-5 investors approved for projects
that often have to be opened on specific timelines.

The
Orlando project features a 25,000-seat stadium, scheduled to open for
the 2017 seasons of both Orlando City S.C. and the Orlando Pride, the
women’s team that da Silva owns with his partner Phil Rawlins.
Originally, the city and county agreed to subsidize the project. But
when state lawmakers balked at approving a sales tax rebate, da Silva
turned to the EB-5 program, something Orlando’s mayor, Buddy Dyer,
cheered.The
team’s solution “ended up being a win-win-win for everybody,” Dyer said
in his office near the 10.55-acre building site, where the skeleton of the stadium is taking shape. “What I tell other mayors is that I’m the happiest mayor in America, and I go through the whole litany, including soccer.”

Brazilians
are soccer-mad and some even follow Orlando City, whose games are
broadcast in Brazil and who are led by Kaká, a World Cup winner for
Brazil and a former world player of the year.

Da Silva’s sales pitch has benefited from several years of political and economic turmoil in Brazil, where some of the country’s elite are rushing to move money offshore.

The
club said it had already attracted 30 investors, bringing in $15
million, or 10 percent of the project’s cost. Rawlins, the founder of
the team and its president, said about $5 million in new commitments is
secured each month.

“I
don’t know why people haven’t taken more advantage of it, becauseit’s a
perfect thing when you’re building a stadium,” Rawlins said of the visa
program. “The program is really about economic development.” Mark Abbott, the deputy commissioner of M.L.S., said the league had reviewed the financing proposal and found it “innovative.”

“The
league doesn’t permit this type of financing for clubs,” Abbott said,
“but for stadium projects, we thought it was appropriate.” In
addition to their stakes in the company that runs the stadium,
investors in the project receive two club seats for 10 seasons. (The
investors have no control over the team itself, which is part of a
separate company.) But da Silva and others did not dispute that the
visas were the real draw.

Using
the EB-5 program, though, can be complicated because theconstruction
site must be in an area with high unemployment. To qualify, boundaries
are sometimes gerrymandered to create an economically challenged (but
essentially manufactured) neighborhood.

Developers
also must spend millions of their own money to start the construction
because it can take months and even years for the government to approve
each EB-5 visa. Visa applicants must pass a background check and prove
that the project is viable and will create at least 10 jobs for each
visa issued. The visas can be made permanent after a two-year
probationary period.

Some
financial advisers recommend that foreigners who are considering
putting $500,000 into a real estate project choose a hotel, mall or
other more certain venture — anything but a sports stadium, whose main
tenant could have unpredictable results.

“When
these guys win games and championships, great, but if they’re not, that
cash flow could change,” said Michael Gibson, who helps foreigners
invest in EB-5 projects. “Why invest in that when you can invest in
something steadier?”

It is unclear how long other sports franchise owners will have the EB-5 program as a financing option. It is facing new questions on Capitol Hill,
where lawmakers are trying to close loopholes that allowed money to be
steered from projects in needy areas toward wealthier districts. Some
EB-5-funded projects have turned into boondoggles, producing little or no economic benefit. In other cases, foreign investors have accused developers of misspending their money and not paying promised returns.

Fast-forward to 2015. The blood
pressure-spiking DHS IG report released last week confirmed what
whistleblowers have been telling Capitol Hill for years....

In the words of one DHS official at the Immigration and Customs
Enforcement bureau, Mayorkas "absolutely gave special treatment" to
electric car racket GreenTech, which zealously sought EB-5 visas for
another group of deep-pocketed Chinese investors. McAuliffe helmed the
company after it was spun off from a Chinese venture. He plugged in
Rodham as president of Gulf Coast Funds Management, which won
designation as an EB-5 regional center certified to invest foreign
capital in federally approved commercial ventures in Louisiana and
Mississippi, including GreenTech. Louisiana GOP Gov. Bobby Jindal and
former Mississippi GOP Gov. Haley Barbour both signed letters urging DHS
to approve Gulf Coast as a regional center....On a
third front, Mayorkas intervened on behalf of EB-5 petitioners seeking
green cards by investing in Hollywood studios such as Sony Pictures and
Time Warner. He had received pressure from the L.A. mayor's office,
where an aide helpfully mentioned she knew a mutual acquaintance of his
from his old law firm, O'Melveny and Myers, and from Rendell, a paid
consultant to the EB-5 regional center representing the foreign
investors. Mayorkas reversed his staff's rejections of more than 200
suspect EB-5 applications and set up a special "deference review board"
to bow to Hollywood.Two decades ago, when the program's
failures were first exposed, Rep. John W. Bryant, a Texas Democrat,protested on the House floor: "This provision is an unbelievabledeparture from our tradition of cherishing our most precious birthright
as Americans.""...